Founder of US halal food supplier charged with fraud over beef exports to Malaysia, Indonesia

IOWA CITY, Iowa—The founder of a popular line of food products for observant Muslims has been charged with fraudulently shipping beef to Malaysia and Indonesia that didn’t meet the countries’ import requirements, federal prosecutors in Iowa said Friday.

Bill Aossey Jr., who founded Midamar Corp. in 1974, is charged with conspiring to change labels and fabricate documents to make products appear that they originated from a slaughterhouse that met Malaysian and Indonesian requirements. Iowa-based Midamar is a leading U.S. halal company that sells beef, turkey, chicken and other products around the world.

His attorney, Haytham Faraj, called the 19-count indictment unfair, saying it was filed after his client rejected a plea agreement. Aossey, a prominent 73-year-old Cedar Rapids businessman, hasn’t been arrested and is expected to soon make an initial court appearance, Faraj said.

Aossey, a son of Syrian immigrants, is the “quintessential American success story,” Faraj said. Midamar, now operated by Aossey’s sons, celebrated its 40th anniversary this week.

Malaysia and Indonesia restrict the import of halal beef products to those from certified slaughter facilities. Halal meat is supposed to be killed in ritual slaughter and processed in compliance with Islamic law.

The indictment alleges that Midamar, which relies on third-party suppliers for meat that it packages and sells, used an unnamed Minnesota slaughterhouse that wasn’t certified to supply beef to customers in both countries between 2007 and 2010.

Midamar employees used nail polish to remove the Minnesota slaughterhouse’s federal establishment number from packaging and put new labels containing the number of an Omaha slaughterhouse that was certified, according to the indictment. Midamar also listed the wrong slaughterhouse on paperwork sent to the U.S. Department of Agriculture to receive certificates for exporting, prosecutors allege.

Faraj said evidence will show that the exported beef met Malaysian and Indonesian standards.

“This was not a case where they were substituting inferior product for the product that was requested. It was a minor regulatory violation that USDA’s own inspectors who were present didn’t think was a violation at the time,” he said. “The product was of the same quality. It met the halal standard.”

He said he believed Midamar was being treated more harshly than other meat companies because of its Muslim ownership.

The investigation dates to 2010, when USDA inspectors seized thousands of pounds of what they called misbranded meat products at Midamar. The agency stopped voluntary inspections at Midamar but resumed them after the company took corrective actions. In 2012, agents descended on Midamar to serve search warrants seizing its business records, computers and bank accounts.

The Council on American-Islamic Relations, the nation’s largest Muslim civil liberties group, said it was troubled by the raid and the secrecy surrounding it.

Midamar’s lawyers have accused the government of improperly trying to define halal standards, saying that should be left to religions. Faraj said the government has backed off accusations that Midamar didn’t understand halal.

“This is, as I call it, the consolation prize,” he said of the indictment. “We couldn’t get you on that, so we’ll get you on something else.”